Good Governance Quiz 2 (Part 2)

Question 1

should not only provide leadership of the board, but also play an important role in the governance practices of the company.

Answer 1

Chairman of the board

Question 2

is the person responsible for leading and managing the entire organization in achieving its organizational goals. it is the duty of the “___________” to collaborate with the board for the overall direction of the company

Answer 2

CEO

Question 3

this is the best entity for steering the company’s strategic direction and evaluating its performance. as a “_______”, questions must be asked during “______” meetings to make sure decisions made by the company will be for the best interest of the company in long term.

Answer 3

Board of Directors

Question 4

Considered owners of the company through their ownership/holdings of stock shares, this group actively seeks to maximize stock price increases over a period of time.

Answer 4

Shareholders

Question 5

any group of people who are affected by how a corporation operates in ((i.e., employees, suppliers, government and society among others)

Answer 5

Stakeholders

Question 6

what are the theoretical perspective

Answer 6

1. Agency Theory
2. Stewardship theory
3. resource dependency theory
4. stakeholder theory

Question 7

this perspective assumes that the two principal characters, the agent (Manager) and the principal (owner) are the odds with their objectives. this theory suggests that managers cannot be trusted and act on their interest and not for the benefit of the owners of the company.

Answer 7

Agency Theory

Question 8

the agent acts in the principal’s best interest and therefore acts as a responsible “________” of the company.

Answer 8

stewardship Theory

Question 9

based on the organizational theories, this theory looks at corporate governance from a strategic management view. it examines how the external “_________” of organizations affect how organizations behave for their maximum utility.

Answer 9

Resource Dependency Theory

Question 10

this approach to corporate governance encourages boards to consider their “__________” concerns, not only shareholders, as the metric for a successful organization is the satisfaction of all its “___________”.

Answer 10

Stakeholder Theory

Question 11

the relationship of “____________” with good corporate governance is also supported by research. the influence of “_______” influences board practice and acceptance and contributes to the development of the best practices.

Answer 11

Culture

Question 12

“(1)___________” is generally seen as mechanism that promote good governance, but it is a “(2)________” that gives it the impetus. for instance, there are nuances in corporate governance practices between the east and the west.

Answer 12

1. Corporate Governance
2. Culture

Question 13

an approach that focuses on following specific rules and regulation.

Answer 13

Rule-Based Approach

Question 14

in a “___________” approach, companies are expected to “________” with a set of principles or codes of best practice. however, if they choose not to “______” with any specific principle or guideline, they must explain why they have not done so.

Answer 14

Comply and Explain Approach

Question 15

what are the four functions of a board?

Answer 15

1. Accountability
2. Strategy Formulation
3. Monitoring and supervising
4. Policy Making